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Chegg Files for IPO, Revolutionizing the Student Textbook Business

Jon C. Ogg

Chegg, Inc. has become the latest company to file to come public via an initial public offering. Financial terms have not been seen other than that the filing is for up to $150 million. Chegg plans to list its common stock on the New York Stock Exchange under the “CHGG” stock ticker symbol. For those of you who do not know of the company by name, Chegg is the textbook rental company.

Chegg's IPO filing says, "We have approximately 180,000 unique titles in our print textbook library available for rent. We also offer more than 100,000 eTextbook titles... Our integrated platform, which we call the Student Hub, offers products and services that students need throughout the college lifecycle, from choosing a college through graduation and beyond. Our Student Graph builds on the information generated through students’ and other participants’ use of our platform to increasingly enrich the experience for participants as it grows in scale and power the Student Hub. By helping students learn more in less time and at a lower cost, we help them improve the overall return on investment in education. In 2012, more than five million students used our platform."

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Net revenues have been on the rise. In 2010 sales were $148.9 million. That grew to $172.0 million in 2011 and then to $213.3 million in 2012. Apparently the company needs the cash from this IPO as well. Its losses for the same years were losses of $26.0 million, $37.6 million and $49.0 million, respectively.

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The bookrunners are listed as J.P. Morgan and BofA Merrill Lynch, and other managers in the syndicate are listed as Jefferies, Piper Jaffray, Raymond James, and BMO Capital Markets.

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